US investors continue to liquidate foreign portfolio holdings - BNPP

Research Team at BNP Paribas, suggests that portfolio flow data from the US available until the end of May continue to show that demand for US securities is running at a fairly subdued pace.

Key Quotes

“The most notable feature of the data set relates to the behaviour of US investors, who have continued to liquidate foreign portfolio holdings at a steady pace. US investors have been net sellers of foreign securities in all but three of the past 22 months, such that cumulative outflows from foreign securities have now exceeded total purchases observed during the quantitative easing era.

The implication is that US investors have likely become significantly underweight foreign securities, and the rally in emerging markets seen in recent weeks may mean that that US outflows have resumed and underweight positioning is being reduced.”